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Keeping It Real Estate News and Trends in UK Real Estate, Disputes and Planning Law
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The Government has published its long-awaited guidance on the minimum energy efficiency standards regulations that will start to apply to non-domestic properties in April 2018.  We previously blogged on the topic of MEES here back in 2015; a copy of the guidance can be downloaded from here.

The guidance is intended for use by both landlords and enforcement agencies alike, and contains a useful explanation of the way in which the Government intends the regulations to be applied.  It provides a number of helpful, practical examples of the process for deciding whether or not a landlord is required to comply with the regulations for a particular property and what might be covered by exemptions.

It also sheds some light on some of the points that were not clear from reading the regulations on their own.  For instance, it is clear from the guidance that the Government does not intend a landlord to have to comply with the regulations where an EPC has been obtained voluntarily and has not been used for a sale or letting (a scenario that was previously unclear under the regulations).  This means that landlords who have obtained EPCs for their own purposes and have not let the property since doing so will not have to comply with the regulations for that property until they come to grant a new lease, which from 2023 onwards (when the prohibition on “continuing to let” substandard premises comes into force) will be a significant relief to asset managers who were worried that obtaining a voluntary EPC might bring them within the scope of the regulations.

The guidance doesn’t help to clarify the scope of the “consent exemption”, though.  We were hoping for examples scoping out the sorts of unreasonable conditions third parties could impose that would qualify for an exemption, but instead the guidance simply repeats what the regulations say: the condition must be one with which the landlord cannot reasonably comply.  We therefore still don’t know how reasonableness is to be measured in this context.

The guidance also attempts to elaborate upon the confusing position of listed buildings and buildings in conservation areas.  Under the regulations relating to EPCs, an EPC is not needed for a building that is “officially protected as part of a designated environment or because of [its] special architectural or historical merit, in so far as compliance with certain minimum energy performance requirements would unacceptably alter [its] character or appearance”.  The Government has explained that this means that you do not need an EPC for listed buildings or buildings in a conservation area if compliance with certain minimum energy performance requirements would unacceptably alter their character or appearance.  But if compliance would not unacceptably alter their character or appearance, you do.  The Government seems to think that this clarifies matters, but as it still leaves open the question of what an “unacceptable” alteration might be we are in practice really no wiser!

Finally, it is important to note that the guidance on MEES is clearly stated not to be legally binding or a definitive interpretation of the law; instead, the guidance states throughout that appropriate legal advice should be taken by anyone seeking to apply or to comply with the regulations.  As the regulations are complex and the penalties for non-compliance can be severe (up to £150,000 per breach, plus a “publication penalty” intended to deter through the risk of reputational harm – and there’s a section in the guidance on this, too!), we would definitely echo that recommendation.